Make life easier for your customers, as well as your sales staff
This article originally appeared in the February 2016 edition of INSTORE.
I recently emailed out a survey to my group about custom designing a specific ring. My goal was to see how many ways jewelers were pricing the same ring, what methods they used to price it, how much they charged and which manufacturing process they used.
I sent them an image of the ring below to use as a model.
On that day, gold was $1,137 an ounce (or about $36 per pennyweight) and the ring would weigh 4 pennyweights.
The answers to the question of how people charged ran the gamut. Here are just some of the ways they broke down the job:
➤ $200 for the CAD; $285 to cast and finish; $401 for the gold
➤ $150 for the casting plus $200 to draw the picture and the wax
➤ CAM fee $90; finish labor $30
➤ $610 for gold, wax labor, cleanup and casting $200
➤ Whole job $1,075
➤ Design and wax $300; gold $400; cast and polish $100; rhodium $30
It’s hard to train the sales staff to sit with a customer when you have a complicated system. In our book, you simply choose from four prices and include all of the labor listed. To make the ring pictured is $695 and the gold is $432 retail for a total before stone setting and stones of $1,127. So that’s just for the “semi-mount” — setting and stones are not included. This makes for a much simpler way to figure it up.
In comparison, the jewelers in our survey charged from $500 to $2,097.
Then I asked about closing ratio. If you sat with 10 people for a design, how many would buy a custom design? Seventy percent of the stores had a closing rate of between 70-90 percent. That’s way better than showcase sales, which are a measly 30 percent.
Next question: What is your average sale in dollars when you design with a customer?
Sixty-six percent of jewelers had an average sale between $1,500 to $4,000 with a 3.0-time markup for most and a few at 2.5. Nice work!
How would you make this ring?
The proportion that said hand-carving was only 10 percent. CAD/CAM was a whopping 60 percent.
What to make of these numbers?
Simple: If you want to make great money, be different and get into custom designing. Higher average sale, higher closing ratio, better markups. Just please make it simple for the staff to charge for the work.
David Geller is a consultant to jewelers on store management. Email him at dgellerbellsouth.net.